To pivot
is to turn your business
around to adapt to changing technologies,
market demands, or just a better
idea. The pivot can be hard to recognize by
those closest to the company, and may be much easier
to appreciate after the fact. YouTube was first conceived
as a video dating site until the startup allowed its users
to determine the best use of the website, posting what
they wanted. Nintendo was a Japanese playing card
company that migrated its animated characters to the
world of video games, and Instagram started as a mobile
gaming site that nobody but the owners knew how
to use. The HBO show Silicon Valley is a master class in
the art of pivoting. The founder of the fictional company
“Pied Piper” creates a breakthrough compression algorithm
which he envisions as changing the world of
music streaming, but which (over multiple seasons)
has morphed from a glorified storage device to a video
chatting platform. (By the way, Silicon Valley is a must
see for anyone trying to keep up with the latest in Silicon
Valley jargon and trends.) Although the startup
technology sector has given us the most vivid examples
of pivoting at the right time, the concept of pivoting
can apply to any industry and at any stage in the
life cycle of an enterprise.
This column has often addressed the need to periodically
check in with employees, customers, and the
market, to evaluate the perception and success of your
company. Similarly, companies should constantly
consider the value of their products and services to
make sure they are delivering the best and highest
use of their products, and for the greatest value.
Often, a noticeable change in purchasing patterns or
financial indicators may trigger an evaluation. It
may even come as direct feedback from existing or potential
clients. The key, as an owner or manager, is not
to ignore the signs and commentary that could lead the
company to the next level. Once the change or pivot is
identified, there are recommended common sense
ways to move forward.
• Have a story ready to explain the change: whether
it is a 180-degree turn or a tweak in concept,
owners need talking points for themselves and
their stakeholders. Everyone loves a good story, so
make it factual but compelling. “We wanted to
serve the [fill in the blank] need that our customers
are asking for.” “It may not be what we designed
the product for, but we are following the rule of the
market and supplying the demand.”
• Once the trajectory is set, be confident. Every
change comes with its naysayers, internal and
external. The real test of leadership is the ability to
turn the ship even though it may be easier to move
forward. Management retreats and strategy
sessions may be required to focus energy on the
new direction.
• Be adaptive, but efficient. Not everything needs
to be recreated. There may be skillsets or features
from the prior iteration of the company that can
be used in the new. In the YouTube and Instagram
examples above, the technology didn’t
change, only the marketing and use of it.
• Less talk, more action. If a change is imminent,
keep the discussions under cover till you are ready
to implement. The timeline between announcement
and launch should be as short as possible
to minimize employee and customer defections.
• Most importantly, be ready to pivot again if
necessary.
Pivoting is really just an accelerated form of business
evolution. Companies are constantly evolving anyway. A pivot is the recognition that an immediate
change may be needed to keep the business alive. To
quote Jared from Silicon Valley, “But now I’m back, and I
am recovering, and I am focused, and we’re going to
pivot. Don’t lose faith, guys!”
Business Insights is hosted by the Law Firm of KPPB LAW (www.kppblaw.com).
Sonjui L. Kumar is a founding partner of KPPB LAW, practicing in the area of corporate law and governance.
Disclaimer: This article is for general information purposes only, and does not constitute legal, tax, or other professional advice.